Barrick Bonds Surge as Miner Plans Equity Sale: Toronto Mover

Nov. 1 (Bloomberg) -- Bonds of Barrick Gold Corp. rose
after the the world’s largest gold miner said it would raise at
least $3 billion to repay a portion of its $15 billion in debt.

The company’s $750 million of 5.25 percent notes due 2042
increased 6.6 cents on the dollar to 87.49 cents at 8:38 a.m. in
New York, according to Trace, the bond-price reporting system of
the Financial Industry Regulatory Authority. The bonds yield
6.19 percent, down from 6.78 percent yesterday, before the
Toronto-based miner announced plans for Canada’s biggest equity
issue since 2009.

Barrick, which is contending with a plunge in gold prices
this year, also plans to suspend construction at its Pascua-Lama
project, an $8.5 billion mine on the Argentina-Chile border.

The stock offering, which may generate as much as $3.45
billion if an over-allotment option is exercised, highlights
“the extreme measures management is taking to strengthen its
balance sheet in a difficult operating environment,” Wen Li, an
analyst at CreditSights Inc. in New York, wrote yesterday in a
report. “Management is prudent in suspending the project to
reduce its near-term capital outlay and support its liquidity
position.”